WSI: Generally Mild Temperatures Expected for Much of the Eastern US in Late Fall and Early Winter

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Historically strong North Pacific signal to trump weak El Nino.

WSI US Weather Outlook Oct-Dec 2012

WSI US Weather Outlook Oct-Dec 2012

The biggest wild card heading toward winter is the degree of atmospheric blocking in the North Atlantic, typically referred to as the North Atlantic Oscillation (NAO).

WSI (Weather Services International) expects the October-December period to be cooler-than-normal in the western third of the US and in parts of the Southeast, with above-normal temperatures across most of the eastern two-thirds of the country. The largest positive temperature anomalies are expected in the Great Lakes region. The WSI seasonal outlooks reference a standard 30-year normal (1981-2010).

“The strongest, current climate signal is the cold North Pacific Ocean, otherwise known as the negative phase of the Pacific Decadal Oscillation (PDO). This signal typically helps drive cooler weather in the western US and warmer temperatures in the eastern US during late fall and early winter,” said Dr. Todd Crawford WSI Chief Meteorologist. “Evidence is continuing to build that the emerging El Nino event is going to be relatively weak, and WSI believes that the impacts of the strong PDO signal will more or less trump the El Nino signal, going forward. The biggest wild card heading toward winter is the degree of atmospheric blocking in the North Atlantic, typically referred to as the North Atlantic Oscillation (NAO). Over the last few winters there have been wild swings in the NAO, from historically strong blocking winters (2009-10 and 2010-11) and very cold eastern US temperatures, to historically weak winters (2011-12) with record warm temperatures. It is still too early to predict the behavior of the NAO for the upcoming winter, but it is clearly the key to a successful winter forecast. For now, we are relying on the PDO signal, which generally suggests a cool period for the western US and a mild period in much of the East.”

In October, WSI sees the monthly breakdown as:
Northeast* – Warmer than normal
Southeast* – Warmer than normal, except FL
N Central * – Warmer than normal
S Central* – Warmer than normal
Northwest* – Cooler than normal
Southwest* – Cooler than normal

According to Chris Kostas, Senior Power and Gas Analyst at ESAI, “While weather-related demand is typically low in the Midwest, Mid-Atlantic and Northeast in October, the warmer-than-normal temperatures expected this year will ensure power and gas demand is soft and stable. Gas prices will likely remain subdued as below-normal heating demand helps to push natural gas inventories above last year’s record. Low gas prices and soft shoulder-season demand will keep power prices under pressure. Some power price weakness will be offset by seasonal generation maintenance, however. Implied market heat rates should be firm as gas-fired generators continue to replace coal-fired generators that are struggling to compete in the low gas price environment.”

In November, WSI forecasts:
Northeast     – Warmer than normal
Southeast     – Cooler than normal
N Central     – Warmer than normal
S Central     – Warmer than normal, except eastern TX
Northwest     – Cooler than normal
Southwest – Cooler than normal

“Warmer-than-normal temperatures in the Northeast and the Great Lakes region in November will reduce early season heating demand in those key regions. Gas prices should remain soft due to below-normal heating demand. The mild temperatures should also ensure that natural gas inventories will hit a new record in November. In Reuters’ most recent, end-of-season, storage poll, analysts forecast natural gas inventories will peak at 3,973 Bcf (ESAI’s forecast is 3,925 Bcf). Mild temperatures in MISO, PJM, NY and New England will keep electrical loads soft in those regions. Soft shoulder-season power demand, combined with low gas prices should keep power prices subdued in those regions, as well. Implied market heat rates will be supported, however, as seasonal generation maintenance reduces available baseload units in November,” Kostas added.

In December, WSI forecasts:
Northeast     – Warmer than normal
Southeast     – Colder than normal
N Central     – Warmer than normal, except SD/ND and northern MN
S Central     – Warmer than normal
Northwest     – Colder than normal
Southwest – Warmer than normal, except southern CA

“With mild temperatures expected to stretch from Texas to New England in December, delivered gas prices are likely to remain subdued heading into winter. Natural gas basis pricing in the Northeast typically begins to increase delivered gas prices in December. However, with mild weather and continued growth of Marcellus shale gas production this year, Northeast basis prices are expected to be very soft, relative to historic averages. New England could be the exception, however, as Algonquin Citygates basis pricing has been demonstrating seasonal strength. Power prices in MISO, PJM and New York are likely to be soft, as a result of the mild, early winter power demand and weak delivered gas prices. Power and gas prices are also likely to be soft in ERCOT in December due to the mild temperatures,” Kostas noted.

WSI provides customized weather information to energy traders. It will issue its first official winter outlook on October 23.

*To view the map defining WSI’s US regions, click here.

About WSI
WSI (Weather Services International) is the world's leading provider of weather-driven business solutions for professionals in the energy, aviation and media markets and multiple federal and state government agencies. WSI is a member of The Weather Channel Companies and is headquartered in Andover, Massachusetts with offices in Birmingham, England. The Weather Channel Companies are owned by a consortium made up of NBC Universal and the private equity firms The Blackstone Group and Bain Capital. More information about WSI can be found at http://www.wsi.com.

About ESAI
Since its inception in 1984, Energy Security Analysis Inc. (ESAI) has been dedicated to monitoring, analyzing and synthesizing information about world-wide energy markets. Tapping the talents of its senior-level staff, ESAI provides clients with unparalleled insight into where the markets have been and where they are headed. ESAI provides ongoing systematic analysis of energy prices in the oil, natural gas and energy markets. For more information on ESAI services, see http://www.esai.com.

Contacts:
Linda Maynard    
WSI
(978) 983-6715    
lmaynard (at) wsi (dot) com

Tommy Sutro
Energy Security Analysis, Inc.
(781) 245-2036
tsutro (at) esai (dot) com

Editorial Contact:
Barbara Rudolph    
Rudolph Communications, LLC
(781) 229-1811
bjr (at) rudolphcommunications (dot) com

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